Manufacturing Sector Shows Mixed Signs in September, Despite Persistent Challenges
The manufacturing sector's struggles persist, with the ISM Manufacturing PMI for September standing at 49.1%, despite a slight improvement from August's 48.7%. Meanwhile, the production index entered expansion territory with a reading of 51.0%.
The personal care and cosmetics industry led the way in expansion, marking the first time since August that more than one industry showed growth. This follows a trend of two industries expanding in September 2022. Despite this, the sector continues to grapple with challenges such as tariffs, inflation, and geopolitical issues, as cited by respondents.
The employment index registered 45.3%, indicating a contraction but at a slower rate than the previous month. Some businesses are reducing overhead by letting go of experienced workers due to decreased orders. This is the seventh consecutive month of contraction in the manufacturing sector.
While two of the five subindexes (production and supplier deliveries) showed expansion, the new orders index fell to 48.9%, indicating contraction. Only five manufacturing industries reported growth in September, with petroleum & coal products being the sole expanding industry among the six largest sectors.
Although there are signs of improvement, such as the production index entering expansion territory and the personal care and cosmetics industry leading growth, the manufacturing sector continues to face significant headwinds. Businesses remain challenged by external factors, and employment remains fragile. The sector will need to navigate these issues to return to sustained growth.
